In This Article:
(Reuters) - U.S. Bancorp's reported a rise in its fourth quarter profit on Thursday, helped by an increase in trust and investment management fees.
The expectation of more rate cuts and business-friendly regulations anticipated under U.S. President-elect Donald Trump's incoming administration has fueled an equity market rally.
The lender's trust and investment management fees rose 13.2% driven by growth in equity markets, while payments revenue increased 1.6% in the quarter.
Bancorp has increasingly been focusing on fee-based products and services, which represents about 40% of its total revenues, as a way to generate more stable revenue.
The bank expects total net revenue growth to be between 3% and 5% for 2025.
On an adjusted basis, net income attributable to the lender rose to $1.75 billion or $1.07 per diluted share, in the three months ended Dec. 31. That compares with $1.63 billion or 99 cents per diluted share a year earlier.
The Minneapolis, Minnesota-based bank's provisions for credit losses rose to $560 million in the fourth quarter, versus $512 million a year earlier.
Banks have been setting aside more money to cover potential losses due to bad loans, as higher interest rates make it more likely that borrowers will default on their mortgages and credit card debt.
U.S. Bancorp's net interest income (NII) on a taxable-equivalent basis- the difference between what banks pay customers on deposits and earn as interest on loans- rose about 0.8% to $4.18 billion in the quarter compared to a year earlier.
The bank's net interest margin - a key measure of lending profitability - fell to 2.71%, compared with 2.78% in the year-ago period.
U.S. Bancorp stock gained 10.5% in 2024.
(Reporting by Prakhar Srivastava and Vedant Vinayak Vichare in Bengaluru; Editing by Tasim Zahid)